Wednesday's bond market has opened in negative territory as investors turn their attention towards stocks and earnings. The stock markets are showing gains with the Dow up 88 points and the Nasdaq up 30 points. The bond market is currently down 6/32, which will likely push this morning's mortgage rates high by approximately .125 of a discount point. There is no relevant economic news scheduled for release today. Tomorrow morning brings us the release of March's New Home Sales report that will likely be of little importance to traders. It is expected to show another decline in sales of newly constructed homes. The big news tomorrow will be March's Durable Goods Orders. This report gives us an indication of manufacturing sector strength by tracking orders for big-ticket items at U.S. factories. Current forecasts call for a small increase in orders. A decline in news orders could help boost bond prices and cause mortgage rates to drop tomorrow mo rning. However, a stronger than expected reading would indicate that the manufacturing sector is gaining strength and would probably help drive mortgage rates higher. The Labor Department will give us weekly unemployment claims figures tomorrow also. They are expected to say that 375,000 new claims for benefits were filed last week. A higher number could be considered positive for bonds, but this data usually doesn't influence mortgage rates unless it varies greatly from forecasts. This week's 5-year Treasury Note auction is scheduled for tomorrow too. These sales sometimes bring volatility to the bond market ahead of the actual sales as investors prepare for them. However, that weakness is usually only temporary and will correct itself after the sale is complete as long as it was met with a decent demand from investors. Results of the sale will be posted at 1:00 PM ET. If there was a strong demand, bond prices should rise during afternoon trading. Bu t, lackluster interest could lead to weakness and upward revisions to mortgage rates. If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Float if my closing was taking place between 8 and 20 days... Float if my closing was taking place between 21 and 60 days... Float if my closing was taking place over 60 days from now... This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers. | ||||||||
Cole Mortgage - Raleigh, NC
Sr. Loan Officer
Hey hey Chris,well we all know you have an Xsite by alamode. Becareful on putting up info without permission from Alamode. I don't know if they have any rules about it but you might want to check first just in case. I think this info goes over most peoples heads, shoot most mortgage guys don't even get it. But good post anyway.
Apr 23, 2008 05:02 AM
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